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tv   Bloomberg Markets European Open  Bloomberg  December 16, 2019 2:00am-4:00am EST

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>> good morning welcome to the european open. i am anna edwards aside matt miller in berlin. a health check. pmi data do across the nation. futures solidly higher. ♪
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>> chinese stocks turning higher after a phase i trade deal to calm and solid industrial and retail data. consequences.be china threatening retaliation and germany bands hallway -- hallway. calm -- carmakers could be caught in the crossfire. prime minister boris johnson prepares to name his new cabinet. sterling strength continues as investors stay positive on brexit. under an hour away from the start of cash equity trading. taking a look at what futures look like, all green across the board. ftse futures still gaining solidly. it looks like it could be a risk on day.
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>> absolutely. a slightly sluggish picture coming through, a lot of questions hanging over the trade story. to what extent are we going to see the rollbacks? questions and after that, the mixed picture on chinese data. retail sales better than expected. mind andof that in with some of the euphoria that see the msci pacific fairly flat. a couple of red headlines closing the bloomberg. inrth quarter sales coming just below the 62 billion that had been anticipated. world to buy cineplex.
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we will get some more on various news. it seems as if it is continuing at a bit of a theme. bloomberg markets editor joins us not from singapore but onset in london. a little bit of uncertainty as to where we go next on the trade deal. better to travel then arrive is an old adage i have seen a couple times this morning. where are we on the trade story? >> we have liveried the best case application. there were many different terrorists that could have broken it down. in line withered expectation. it has removed major
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uncertainties, which means it will be a positive going into christmas. we have a little bit more certainty and good news. , overall it says china is slowing down but not as bad. slow, gradual slowdown. it is quite a good news story, but not much to get excited about. longer-term? you have more certainty on the u.s. china trade, you have the deal and the british election that will likely lead to some uncertainty.t isn't there a lot more certainty for global trade, for global growth? theou are absolutely right macro environment is turning increasingly positive attitude
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and where we see the stimulus seeping through into the data. pmiave all seen the service and we are seeing the central data pick up and macro environment providing a little bit of certainty, but the environment is improving. already pressing in a lot of optimism and they could rally further into next year. and when thell go environment will change is a different story. continue to make new highs every week. i do think the u.s. will like them. we saw on friday a big jump in cable. up by another 6/10 of 1%. we are looking at deals coming canadian dollars.
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thinking that the pound will go a little further than it would on thursday. you never know. let me ask you about the bank of england because that will be a big feature that we look at this, as well as those surrounding boris johnson's new government and putting the brexit plan into action. >> i was having dinner with an equity fund manager the other night. that extra layer of certainty is in the market. they will start spending money again. the bank of england is going to be disappointed if they expect an immediate fresh upside. it is hard to change policy. we have delivered what they were expecting. a little bit more certainty, but still dealing with the negotiating pact.
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they will be disappointed if they are seeking immediate guidance. it might peter out. >> thank you for joining us. managing editor with us there, live in london. next, we will take a look at the stocks to watch this morning, including german carmakers. also, remember that bloomberg radio is live on your device or on digital. if you are in the london area, tune in. this is bloomberg. ♪
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>> welcome back. this is the european market open.
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we are looking at futures that are positive across the board. is ang us from frankfurt strategist at commerce bank. the most accurate forecaster in the third quarter of this year, according to a bloomberg index. the are talking to somebody who knows what they are talking about. what do you make of the appreciation that we have seen and where you think the yuan is going now that we have more certainty? obviously, the reaction is understandable because a big risk factor is the introduction of further tariffs or escalation of the trade war on the chinese economy. it is off the table. we see a de-escalation of the conflict.
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our base case is that you will see a cease-fire for the time being in this trade war. this appreciation is certainly understandable, but on the other hand, from a fundamental point it isw, i do not think sustainable because the chinese economy is still slowing, so it is an interest of chinese officials to let the yuan depreciate moderately and we will see that over the next year. it will depreciate moderately as it continues to slow. showsave a chart that implied volatility. what do you make of the messaging that we are getting from volatility markets at the moment, signaling caution to be the message that you take away. you see this volatility coming
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back under control? right toink we are remain slightly elevated? that higherk implied volatility is are justified in this case. theng the resolution of first phase of the chinese trade finale know that a resolution of the conflict, we will enter a second phase of thetiation, seeing that first phase wasn't exactly smooth, i would not expect the second phase to be much better. against that background, it makes sense to be cautious. implied volatility is remain at higher levels. >> and you concerned about an escalation in the chinese and german scuffle here? it looks like berlin may limit
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use of huawei equipment. just yesterday we heard from couldvia berlin that it result in problems for carmakers. think we willnot see an escalation, as we saw in the u.s. china trade war. you cannot compare to these two conflicts. i think that we might see some on aased tensions, but much more diplomatic level, much more managed level, nothing that ,hould shake market incredibly therefore, i am relatively relaxed with respect to this new conflict, at the moment. >> stay with us. stay with us for further analysis.
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stocks toto your watch around the world. we are focused on the german and a realistic company is looking at dangers for the real estate company -- industry. let's come to you first on this german auto story because he may not think of autos when you , but it is aei link that they seem to be making. >> he pretty explicitly mentioned that china buys a lot of cars from germany. saying that if huawei is left wasof the network, that specifically mentioned. the tariffs did not go in on sunday. maybe they will get a little bit of a lift today.
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>> speaking of automakers, we have german homebuilders as well with some action. talk to us about what is going on in the market. about oneg for billion euro. on top of that, a stake in a german development firm. one of the top wheel estate firms. the berlin city government has been trying to hammer out this deal that has hit a lot of these companies. >> some guidance coming through. a little bit of a news flow for the fashion industry. >> the numbers are little bit weaker for sales, but it hit then this time because black friday came here in the year.
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to find anled auditor because the reputational risk brought with it. time, belgium looked at them and said that there were no material underreporting, but some clerical errors. donew dividends, but they say that they see signs of recovery. >> thank you for that. all theers can get stock stories by typing first go on their bloomberg terminal and they can also use the mobile app. let's get the first word news. >> boris johnson will appoint new ministers following his landslide vic in the election. the prime minister will name his senior team as he welcomes conservative members of parliament to london to take
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this -- take their seats. paving the way for the eu divorce to take place. the effort to rein in fossil fuel pollution has stumbled after u.s. talks water down language of previous years. moreng the meeting after than two weeks of discussions, only agreeing on deeper cuts to greenhouse gases. wanting to meet their goals and also failing to agree to fix the problems. the chinese premier has better rated the firm support for carrie lam. meanwhile, another weekend of protest in the commercial area with demonstrators throwing glass bottles and other items at police.
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global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> thank you very much. the first word news update in london. coming up, it is pmi day in europe. is there a chance that things are looking up? proof in the manufacturing pmi. that would be part of our coverage. it is live on your mobile device . this is bloomberg. ♪
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>> this is bloomberg markets. we are 40 minutes away from the
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open across europe and u.k. and we have futures up across the board. let's catch you up on the stories that you need to know before that. anus cranny has been taking look at the inflation picture and joins us from dubai. anyone who dumped treasuries last week is taking a huge risk. >> they could be taking a huge risk. if you dumped treasuries last look at the inflation, global inflation and european inflation and european inflation all indicating in the negative. .he question is this wages are rising in the u.s., but they are not peeking through on inflation. have 16%market, you
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returned this year. the biggest since 2014. , maybe iton remains is too soon to pull the ripcord on those long bond positions. maybe that is the whole point. the bond traders are supposed to be ahead of the curve. >> shocking generalization. thank you very much. 720 -- 7:22 in london. it is pmi day in europe, so we will see preliminary meetings. after the u.k. election provided a selloff in the sterling, will prove it?ta dump
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.our thoughts on where we head the sterling story is very much to the for. see markets adjusting to this new normal. that is part of it, but then this euro story is interesting, given the data we will get today. what are your expectations? pmi, they think the will support this picture that has emerged, the worst is over as regards the u.s. economy. think the data today will support this picture, but generally, i expect risks to particularlyhigh, when you are looking at industrial recessions in
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germany. even if the data is on the might support the euro in the short-term, but generally, the economic picture remains fragile. some furthering weakness in the months ahead, not a particularly strong upswing, which would be needed to support your appreciation trend. that we can remain at these lower levels for a little until theleast idiosyncratic factors for the sterling become a little bit more negative again. >> doesn't look like the u.k. is about to spend a lot of money? that is what a lot of economists
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have been asking. it does not seem forthcoming here. expectation for where it will hit hardest? promises by the government and the campaign, so i would expect some school stimulus on the u.k. side will be more moderate, particularly, germany has been very reluctant to become more expansionary. on fiscal little bit policy, but nothing extraordinary. they even see less necessity to do anything at the moment. more stimulus on the u.k. side. >> i want to ask you about the fed. about how the fed will be
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fighting for its independence in 2020. we could see a fed that slowly begins to hike rates. is your fed expectations for 2020? morethink it is a lot isish than the market pricing in at the moment. the fed has been more dovish than the ecb. int has not been factored during the exchange rates. think we will see that over the next year because generally, the u.s. economic picture, economic growth and inflation. to would expect the fed start normalizing interest rates , maybe towards the end of next year, but i do not think will see any of that because political pressure will be particularly high with u.s.
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matt: this is bloomberg markets, the european open. i am matt miller in berlin. we're looking at futures up across the board. alongside me in our european headquarters in london. anna: take a look at the events to watch out for. a busy week. today come the bank of england publishes its financial stability report. it provides its views of the u.k. financial system. in the u.s., investors keeping a close eye on the repo auction.
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on tuesday, the u.k. parliament reconvenes after the conservative party gained a large majority. a busy couple of weeks for u.k. politics. on thursday, the russian president delivers his annual year-end news conference. same day, the bank of japan will announce its final policy decision for 2019. and a friday deadline to continue funding the government. that is intended to try to avoid a shutdown. we will see what develops there. let us talk about what is going on in china. the chinese economy is showing signs of stabilizing. the industrial output rose from a year earlier and retail sales expanded by 8%. both beating the consensus. eleanor, with is
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us on set from ts lombard. good to speak to you about what is going on in china. let us talk about the recent data. what kind of picture does that paint? it is not all about the trade war, china, is it? : the performance of the shanghai composite in general has been much more about the china domestic slowdown story than about the trade war. given the fact that steele is coming through at a time when we are seeing a stabilization occurring, it is it good news that it is good news for stabilization in china. matt: are you concerned about trade issues with other countries? beijing could limit berlin's auto exports. eleanor: i don't think china is
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exports go after auto with germany at this stage. those are largely threats to put pressure on the huawei decision. the contracts have yet to come up. looks like it will come down to some domestic wrangling in berlin. right now, it is just threats from beijing. anna: watching that with interest. in terms of china and the united states, you say you think china has won the first phase of the trade war. this is the shanghai composite underperforming the s&p over the last two years. from a market perspective, the asset classes -- why do you say that china has won? eleanor: the market performance is down to financing credit
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conditions. one is a winner in a trade war. regarding the status of negotiations, we have seen more concessions from the u.s. side. demands the request and made at the start of the trade war have been put to the side. pullback is a political win for the chinese president. matt: what do you expect the new paradigm to look like? we are not going back to relations the way they were. democrats nor the president want that. what is the new global paradigm for trade going to look like? eleanor: i think we see signs of how this will develop. towill shift from tariffs
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other forms of restrictions. especially if we get a democratic president. they will look more at sanctions of human rights issues. this is how the story develops. itween now and the election, think the political agenda in the u.s. will be focused on different things and not on china. anna: if we do put phase one to bed, that is just part of the story. leaving some of the hardest stuff for phases two and three if at all. as you see western businesses doing more business in china and in particular, financial services getting more access. what are the implications of that? eleanor: china is highly protectionist when it comes to data. lawas its 2016 security which european partners have
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also highlighted as a key source of concern. --t the law does is companies have to store data lake -- locally. this will be a defining feature. make -- howre we to do we differentiate private companies from state run enterprises in china? i was looking at the dialer mler -- daimler story. german companies are worried u.s.they will have sisyphus concerns. trend is definitely
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for private companies being .equested to help out funding ship.ure of donor in certain cases, private companies located in those provinces have been asked to step in and provide refinancing for those banks. anna: thank you, elinor all caught. -- eleanor olcott. the threat of retaliation should germany impose a ban on huawei. germanll be covering the story on the radio. this is bloomberg. ♪
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anna: welcome back to the european market opened this monday morning. 20 minutes to go into the start of the trading session. futures suggest we will see a bit of a bounce. >> international flavors and fragrances has reached an agreement for $22.6 billion deal. it seeks to expand in the fast-growing food ingredient business specializing in products like sweeteners and am also fires. is facingotball club a backlash from china. regarding the treatment of muslims in shenzhen.
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the arsenal game was pulled from this green yesterday despite the club's immediate attempt to distance itself from a key player and his remarks. it was slammed in china after an executive showed support for the democracy protest in hong kong. boeing is considering temporarily halting production of the 737 max as clearance for the grounded jets looks increasingly likely to slip beyond the january 2020 timeframe. a temporary cause would be less disruptive than a further slowdown in production. leading chinese automaker is considering doubling its stake in daimler. putting almost 20% of the german company in the hands of two major chinese owners. meanwhile, mercedes will delay the u.s. debut of an electric vehicle. the brand will start sales of
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its model in 2021. that is your bloomberg business flash. matt: thank you very much. china has threatened retaliation if germany excludes huawei as a supplier of 5g telephone equipment. beijing's ambassador to germany says there will be consequences in the result of a ban. in the millions of vehicles german carmaker sell in china speaking of daimler. this follows growing resistance against huawei among lawmakers in angela merkel's coalition. joining us is chris reiter. or whatous first off indications do we have first off that berlin is thinking about banning huawei's equipment in
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the 5g network? chris: they have been torturing themselves over this decision for months. they are deciding whether to effectively ban without effectively singling them out. that is the issue that merkel is dealing with. tight they walk this balancing act between u.s. interests and protecting the network as well as economic interests in china. anna: what is the expected retaliation? the ambassador is making the direct link to the auto sector and there could be other forms of retaliation available. this is where the german economy is vulnerable because this is not a sector doing great at the moment. and they sell a lot in china. chris: germany is in a really vulnerable position at the moment and politically as well. german politics is anything but stable. you see that in merkel's own
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party threatening to put her under pressure for this. in germany, the economy itself -- the connections with china are growing on a daily basis. autoe that with the market. in turn, chinese companies are purchasing major stakes in german companies. that is a difficult position for merkel's politics to be in. and germany is very much under pressure to get its digital infrastructure up to speed. sideline ang to company like this puts them in a difficult position. matt: and they want to keep their data private. rather than appeasing the u.s. and china, the major concern is that the germans do not want people, other countries, spying on them. that is the one problem.
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on the other hand, you have the chinese and you mentioned the daimler story. which bloomberg published over the weekend. our reporters saying that ba ic, a chinese company come is considering upping its stake in daimler by 10%. china would essentially be shooting itself in the foot if it limited daimler exports to china considering it will own a 20% stake in the company. chris: china takes the long game also. the question is -- china has the capacity to hurt germany unlike germany who cannot hurt china in the same way. in terms of what you were saying about data security come in germany it is really important and sensitive. you have to think about the
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tasi files down the road. anna: what is the attitude in berlin of chinese economy -- of chinese ownership of german companies? story and the battle for that business that really put this into the political spotlight. where have we traveled since? chris: that remains a hot topic in germany. there have been a lot of efforts over the summer to restrict takeover lost to have more control and more oversight over takeover and it is directed specifically at china. there is a lot of concern in germany of a creeping takeover by china. they are doing a lot to try to limit that. but you go to the connections between german business and
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chinese business, the connections are getting tighter. the ability for germany to restrict chinese influence is difficult. and we see that with 20% of an iconic german company owned by chinese businesses like in piecemeal fashion. it is hard for germany to put a full stop to it. it is a sensitive issue that germany is making moves to try to limit. matt: chris reiter is our reporter and editor on auto companies out of berlin. we are minutes away from stock trading across europe. coming up next, we will take a look at the stats you will want to watch or. a huge premium to friday's closing price. this is bloomberg. ♪
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anna: welcome back to the european open. this is bloomberg markets. we are 10 minutes away from the start of the equity trading day. we stay in london for an update. >> boris johnson will appoint new ministers to his cabinet today following his landmark -- landslide victory. he will name his senior team as he welcomes 109 new conservative members. downing street says the government will introduce a law to deliver brexit before christmas paving the way for the eu divorce to take place by the end of january. china has welcomed the signing one.e signing of phase saysinistry of finance they will also refrain from imposing duties. will also be a
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continued suspension of tariffs. >> we don't have a age. -- we don't have a date. i will tell you this, the second phase two will be determined on how we implement phase one. it really is a remarkable agreement. it won't solve all of the problems. >> china's industrial production and retail sales both the estimates in november. -- both beat estimates in november. surging past expectations. retail sales expanded by 8%. but investment is slowing. global news, 24 hours a day, on air and on quicktake by
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bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. thank you. participants will be watching today's activity as a bellwether for potential year and finding stress. and whether the fed has been affect did in relieving the pressure we have been reporting on. for more, dani burger joins us out of london. >> today is a key test for the repo market and whether the fed has done enough to relieve the pressure on some of the issues. for one, there is a treasury auction today. in thesh balance sheet treasury starts to build up like it did in september, we could see cash drain from the system making it harder to fund daily
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operations. it is not just the treasury auction. we also have a corporate tax payment due. what is different this time is one, it is december. the seasonal illiquidity in the market and the treasury has started its operation of injecting half a trillion dollars into the system by year end. there is a 32 day operation starting today. the question swirling around fed doneday is has the enough to relieve the stress in the repo market? anna: we approach the start of the european trading day. time to check in on other news. bank of america is out with a 2020.ld call for annmarie hordern has more. >> they are calling it a melt up for risk assets of are the first
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order of next year. strategists say they can see the s&p 500 reaching over 3000 on the third day of the third month of next year. a 5% increase from friday's close. inc. of america says -- right fit, trade war. it will all be taking a backseat. frontload into the first quarter of 2020. anna: watching for that melt up. stock stories. about cineplexe -- we spoke reflate about cineplex -- briefly about cineplex. this is all part of the consolidation story. trying to get scale and efficiencies from declining
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numbers. and city world already has a u.s. exposure. a london business with a lot of international exposure. matt: and we have a property deal in germany. a 17%operties will pay premium to purchase shares in adler real estate group. a billion-dollar purchase. the interesting thing is this comes as a berlin government is trying to work out a plan to cap rents for five years. and you pierce some activists and politicians here are talking about taking private property a way from investors like this and assuming ownership.
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privatization. a jeremy corbyn socialist like move. you would think that would be alarming. we continue to follow those stocks. the market open coming up. this is bloomberg. ♪
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anna: a minute to go until the start of cash equity trading this monday morning. stocks set to open higher on a double those of positive news. the signing of a phase one trade deal and solid improvement of retail sales in china. germany bans huawei as a supplier of five g network. u.k. prime minister boris johnson prepares to name his new cabinet. sterling trends continue as investors stay positive on brexit. futures are looking at that are up across the board in europe. 0.5% in frankfurt.
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cac and dax. the looks like a risk on day as uncertainty has dwindled to some extent. the market is about to open. ready forus get another trading day and week and where we left things on friday. a lot of optimism in the u.k. thet the gun's -- about certainty to the brexit path it least the short term. fx -- the euro is stronger and not just the pound. the strength anticipated in the u.k. economy. the pound is up by 0.4%. the euro up by 0.2%. will that lead to gains from exporters from the continent? markets are opening to the upside kind of in defiance of
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what we saw in the asian session. prettyrall reading is positive. given the fact also that we do not have a signing day or any details about the phase one trade deal just yet. euro stocks up. the french market is up by 0.5 percent. in the netherlands market up by 0.6%. it does seem like a day where the sector picture is not very nuanced. financials entirely in the green. utilities also. we saw quite a bounce in utility stocks on friday. the jeremy corbyn risk being reduced from markets. health care also going higher. where we don't
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just see cyclical moves in stocks. we saw some of the more defensive stocks going higher. this rising tide leaving -- lifting many of the sectors. matt: 525 gainers in the stoxx 600. down andtocks are pretty much everything is open for trading now. everything is gaining. at the american tobacco top in terms of adding points to the index. you also have louis vuitton and hennessy as well as roche. also adding points to the stoxx 600. as far as those stocks that are them kerry group is one of after the isf story. a takeover a lot of people thought kerry group should have made itself.
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it is down 5%. down.en you see hexagon otherwise, there are no really big losers. and pearson is up plp is down by 1.5%. the losers are few and far between. only 69 stocks on the entire index that are down this morning. european markets opening two points to the upside across the board. the pickup in chinese economy in november adding to the optimism. inustrial output rose 6.2% china from a year before. and retail sales expanded baez percent. both of them beating consensus. there is still plenty of downside risk remaining. joining us now is michael metcalfe, head of global macro
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strategy at state street. what are your thoughts on the picture right now because we do ,ave a lot less uncertainty really globally, after last week -- there are still issues and if you look at chinese indexes, they are still far off their all-time highs. michael: the first point to make is the picture is clearer than it has been for quite some time. we have spent much of 2019 worrying about brexit. i'm not saying that either of those things have been solved completely but in the near-term, they will not get worse. and more than likely, they will get a little bit better. i think the market reaction is understandable. and an interesting point in relation to your point about chinese stocks. it is tempting to say that the
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market is quickly adapting in the price of all of the good news but it actually probably has not. there is still white a bit of catch-up. -- there is still quite a bit of catch-up. anna: which assets need to play catch-up? lotael: i think there are a of cyclical assets that are undervalued. particularly in places like energy. the emerging-market stocks in general. and the currency space is interesting. money is leaking out of safe havens like the japanese yen. matt: where do you see havens releasing funds? if people do not need that kind of safety, are they going to be selling gold, selling treasury, selling the japanese yen? aboutl: what you thought
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2019 -- for much of this year we have been worried about higher rates and then recession and than the trade war and then brexit. that does not mean that we won't worry about things. recession risk has not been killed completely. one of the themes of 2020 will be -- is the central bank accommodation going to deliver? not all of the safe haven trends are reversed. you have to question why you would have high holdings of gold in this environment and save havens like the yen. dropping 12% at one point but now template 5%. the biggest drop in a you -- but
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now 10.5%. the biggest drop in a year. they are making a statement about north america. in terms of your recession watch and where the fed heads next, we were speaking to an fx strategist from commerc zbank. some of the data has been strong enough to guide some in the market to suggest that. michael: i don't think it is that unlikely. these are insurances. it will depend on how the global cycle develops next year. it may well be that the insurance was not needed in which case you may take the insurance back. online datain the that we look at. still have the lack of
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tariffs coming into inflation. i think the u.s. outlook is really important for 2020. i think the u.s. will not do quite as well as it did this year and that might be one of the stories. anna: and maybe we will see more detail of the trade deals. michael, thank you. michael will stay with us on the program. up next, u.k. prime minister boris johnson is that to pick his cabinet today. we look at his agenda and what that means for markets. this is bloomberg. ♪
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matt: welcome back. this is bloomberg markets, the european open. we are a little more than 10 minutes into the trading day. green arrows. let us get the bloomberg business flash. internationa flavors and fragrances has reached an agreement to purchase dupont's nutrition division. seeks to expand in the fast-growing food ingredient isthe unit specializes in products such as sweeteners and emulsifiers and has seen growth
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in areas such as plant-based meat. to plate one 5 billion canadian dollars. a 42% premium to the target company's closing price on friday. movie theater operators have been combining. operates when it is 65 movie theaters across canada. china's ambassador to germany is threatening retaliation if it thwarts huawei as the 5g supplier. he made reference to the millions of vehicles german carmakers sell to china. islish football club arsenal facing backlash from china as one of its top players attacked the treatment of muslims in shenzhen.
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the game was pulled off of screens yesterday. distancetried to itself from the comments of the player. that is your bloomberg business flash. anna: thank you very much. victory in theg united kingdom's election, boris johnson is set to appoint new investors to his cabinet today. after a weekend that put the prime minister on a collision course with nicola sturgeon. sturgeon responded that london cannot imprison scotland in the u k and she said against its will. bloomberg daybreak europe anchor has more on this.
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in terms of the narrative of holding the united kingdom together. today's focus will be on reshuffling the cabinet. now, he can afford some change. : we might for the first hear what boris johnson wants. things might be moving quickly but it is a lot more quiet outside downing street. talk loudly enough if i might wake up the prime minister in the building behind me. by the something to look forward to today. in terms of the rest of the week , thursday, we expect the prime minister to deliver a queen speech. that is expected to include a law that will enshrine into
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more spending on the national health service. that is how this week is learning in the run-up to christmas. delivering brexit will be the priority. boris johnson saying he will bring a law to parliament in terms of getting brexit done by the end of january 31. matt: nejra cehic at downing street. michael metcalfe, global head of macro strategy at state street is still with us. are you expecting any surprises? it seems that boris johnson's problem too often does tell people what he actually thinks. michael: i think that the interesting question now is how much of markets factored in the withdrawal bill going throw? -- going through? it will all be about the
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commentary that we get about the shape of the future trading agreement. around the only business which there is still some uncertainty. in terms of what comes next, looking at the data we are just getting here. at french pmi coming in 53.3. below estimates. it is also only just above 50. the euro is pretty strong this morning running into that number. cause -- give us pause? we have talked about this a lot in the last year about when europe would bottom out. the excuse we give is brexit and
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the trade war. in europe is caught in the middle of both. the data needs to deliver. need now, we are going to pauset to see whether the in the trade war will start to turn things around. forestalls inny europe in the last year. matt: global stocks rally, no matter the uncertainty or concerns, the continued rise in risk assets on quantitative easing and central-bank easing, monetary easing. if we get that here in europe, are stocks a by? -- a buy? will the central bank want to make things easier? i did not include
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europe in that list of assets that would play catch-up but clearly european stocks may not be in the top of the list but they would definitely be on the list. but i think at some point the needs to start to deliver. that is going to be the theme of 2020. is the data delivering? what about the central banks promises in terms of effectiveness. and how that bumps up against government policy. i have a chart showing european stocks trading at near record. michael metcalfe, global head of microstrategy at state street. up next, we bring you the stocks on the move this morning
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including a electrolux. the stock is currently down. this is bloomberg. ♪
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matt: welcome back to the bloomberg markets. this is the european open. i am matt miller in berlin. kick off theins to
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day. top stock stories from annmarie hordern. >> starting with the downside. a big move lower for electrolux down more than 11%. negative impacts of about $70 million for the fourth quarter. world is also down. plans to purchase a cineplex. controlling -- a lot of this consolidation but sin cineworld taking control. anna: thank you, annmarie hordern with your movers. all of the investment advice at the tail end of the financial dollopcame with a huge of caution.
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better than they ever had. as 2019 comes to an end, all agility remains at a record low. will the next decade proved to be good for stocks as the last decade. michael metcalfe remains with us. about the background conditions. part of the reason why things have not been worse is because of central-bank action. if they continue to be as accommodative as they have been broadly, it you we still have something to worry about? is one: the u.s. economy of the better performing economies of the decade and yet it has been the slowest recovery we have seen in the postwar
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environment. the accommodation of central banks and the surprising policies they put in play. the difficulty is when in many cases you are still quite close to the zero, how do you get more accommodative from here? has been doingan this for decades already. this may suggest it will be harder. researcherstrepid found you did a ted talk on the way to finance the fight for climate change. no-brainer in a terms of investments. the world is going that way. from greta to the german climate package. if you look under the hood, you can see the german it climate package is a little disappointing. dredhe conference in the took a step backwards.
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what do you think of this as an investment? -- obviously,nk the lack of agreement in madrid is disappointing. at the direction of travel on this is pretty clear. the momentum is building. and things that the green bond market hold are also growing very quickly. the ted talk with an idea about trying to get central banks involved as well. through the use of funding green bonds. i don't think we are that far away from that either. in this sense that we have central banks holding very large bond portfolios. the green bond market will get big enough at some point. ona: taking a different line
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how it's to get involved on the climate change debate. christine lagarde. some on the government counsel, the ecb is less keen. i wonder if that is the difference in the stocks. it matters. when it comes to influencing the agenda. michael: and central banks have to be careful here. it looks like they are getting into capital allocation very directly instead of trying to pick which bonds to buy. they dointeresting is hold a lot of bonds and they are in that space. and the one thing we do know is that the governments will be heavily involved in it. it will come together as expect it. -- as expected.
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anna: michael continues his conversation with us on bloomberg radio. a $26.2 billion agreement for the nutrition business. leaving kerry behind.
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>> welcome back to the european open. 30 minutes into the trading day. stocks europe index reaches a record high. so spite uncertainties of the phase one trade deal. it looks like it will be signed. to allow european stocks to go higher. that allows ifer the brecks -- for the brexit conversation. we have the german december p.m.i. rising to 52. that's exactly in line with the forecast. the forecast went for that day to rise to 52. nicely over the 50 mark.
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50 services, remember. on the manufacturing side of things where a lot of the focus as been in terms of the stable stablization this echos the french number. 43.4. the forecast 44.6. we touch on the record high on the european stock .600. but we have a poor foreseen picture in the euro zone. et's go to lee yann. leanne: boris johnson will appoint new ministers following his landslide election. he will name his senior team as conservative09 new members of particlement. downing street says they will . troduce a law for brexit china has welcomed the signing
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of phase one of the u.s. deal pledging to suspend certain tariffs for america. he minister of finance will re frain from charging tariffs of cars shipped to the u.s. the international effort to reign in fossil fuel has stumble after watered down language in previous years. delegates left madrid's meeting after more than two weeks of discussion. urging for deeper cuts on greenhouse gases. to meet their goals and also file agree about finance needed to fix the problem. hinese premier league li kai chung has supported lam.
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her annual duty visit in the capital. meanwhile. another week of free throws or roads blocked in the commercial rea of moungkok. global news 24 hours a day on air powered by more than 2700 journalists an analysts and more than 120 countries. this is bloomberg. anna, matt. >> leian gerrins with your first word news. ow, we want to focus on an i.m.f.f. they the latest deal in the fast growing food ingredients business is the biggest ever for new york based company. i.f.f. has fought off competition from irish dairy producers carrie group in order get this deal.
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we talk more about this really a big ticket deal -- i'm going to say this is i.f.f.'s biggest ever acquisition. does it make sense for both companies? li: yes, indeed,s the the biggest i.f.f. in a rapidly consolidating entry. we've seen these by all of the major global play yemplets here i.f.f. striking again after another chunk last year. and we've got to that are big and very serious in the fast growing wellness and has your food supplier seen. and the deal makes a lot of sense for both of them. and there's probably more to come as whole as the industry grew up with growth. >> i was going ask you whether this sets a precedent, manuel.
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good morning to you. will we see more of this from this sector? >> precisely, anna, i think there is more to come. the industry percent is struggling for growth. and there is growth potential certainly for those who have volume and scale. i mean, we've seen a few deals, take mine also, food ingredients sneaker, which is a big deal. as well as there are smaller players. and for a.i.f.f. their attempt to become the leading player in the industry and for dupont mo makes a lot of sense to streamline their portfolio. they've been hit pretty badly. after the mega deal in 2017 -- so they've got to kind of like refocus the business. so this didn't make sense.
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and yes, we'll see more to come over the next few months and years as well. >> thanks so much for joining us. talking to us about the 26 billion purchase of i.f.f. from dew point. up next. -year going to take a closer ok at the future of u.k. housing market with miles ship side. right now, i wanted to show you a chart that we soo. european stocks hitting a day record high. .ight now trading 459:15 so they're among those indexs that have come back to all-time highs. this is bloomberg.
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>> welcome back. it's a positive session for the european market. european stock hitting a record during today's session. %.e stock 600 up by .1 interesting they're making gains as the pounds make gains how we've broken down that negative
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correlation. let's go to bloomberg business flash and we go to lee yann gearrin. anne. they beat carey group as it areas of d in the plant-based meets and pro biotics. britain's sini world is to buy sini plecks. premyull. 2% movie theater operate tors have been combining as they bet they will gain efficiencies to off--set declining numbers. theaters te 165 movie across candy. boeing is temporarily halting
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production of the 737. that will slip toward january 2020. they believe a temporary pause will be less disruptive than a fourther slowdown in production. leading chinese automaker has considered. the move was put almost 20% of the german demean the hands of two major chinese owners. meanwhile, mercedes says it will delay the use of the electric vehicle. they will not have sales oosing instead to grow evy demand. >> and that's your business flash. leigh-ann gearrin. right move says property prices should gain following his election victory. the company thinks three years of pent-up demand will translate into a 2% rise in 2020.
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joining us now is miles. good to see you, miles. 2% next year. that doesn't seem all that much in terms of pent-up demand. could it be higher? >> well, there is that possibility. let's not forget where we've come from. the an yum railts finished in 2019 on just north of .8% rise. and sales have been down .3% in 2019 compared to 2018. but there is signs of demand actually you stripping supply. new properties coming to market. and with sales down by just 3%, there is some price momentum there. upside.sible yum -- matt? >> what do you think of the results of the election. how do you they will affect the market? >> well, we've got more political certainty. it's come before the spring
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market as well. so the traditional home moving season very nornt the u.k. and with londoners trying to land high employment and that pent up deman has bun down. having as an opportunity to have held back by actually coming forward. >> we we have more certainty as to where the brks it will happen. it looks like it will happen. but on the other hand many economists feel like the u.k. economy will be impacted by brexit. and suggests that the company won't do as well without brexit. >> how will dough mystic buyers way up those two things, he thinks. >> i think that we've seen is a lot of domestic sie buyers. families don't growing. life moves still need to happen.
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it's 197% of capacity in terms of sales last year. there is outside going forward for the spring market, an important window. obviously lots of twists and turns to come on brek it. no doubt. >> you see lenders are willing to provide mortgages. what does that look like to you? and is it on the up or hitting a high? >> high end market and that affects london in particular, but they're competing in high lones. 2k4rrs oking for million. between 1.1. and 1.7% incredibly cheap. and that's one of the things that could fuel the higher end market. and the higher end market has laguard in the last
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year or two. >> your two% forecast probably high for lots of regional die version. the higher end in london is different than in other regions. tell me how you expect that to communicate. >> we've had an annual rise at the end of the year that not since 2016. we're forecasting a 1% rise in london. and interestingly in the last six months 1% ahead of the prior year. there is momentum there. it's been a lot of talk in investment in the middle and the northern powerhouse. again, we think rise is going to be higher as they were this year in the ge of 2% to 4% middle regions. original picture, but actually everyone in positive territory.
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what are to you think the breakdown is going to look like? what does it look like now, miles, in terms of foreign and s to actually locate how does it change over the coming years? >> well, we talked about when is the bottom of the london market. and of course, i will when is the right time for london to buy. and looking by as i've said in the last six month, we've seen them agree. and actually once the year has ended on a 1.5 annual fall in london, any month that we're seing in the last 15 months, actually that's the the second best foul. when i think we might well be moving to the london market. actually recover it. and we've not seen and all yun. >> that's interesting.
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miles, politicians like to talk about the housing mark. they like to talk about building more houses. they also like to talk about affordability and health to people. >> do you see any of those things big hospitals and skis help to buy clanges. you see those teams as dominating in 2020? >> obvious rirks there are a lot compliments from all my career. prand see. and the private sector from the conservative government and indeed help to buy been extended from 2021 to 2023. thrant's a, fixed rate mortgages. we need to see what kind of help for the buyers. because it's raising the demo is it. and it is tough to raise that -- to deposit.
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programs more can be done. they're there's a lot of first time buyers. >> thanks for joining us this monday morning. the director at wright move. let's get back to our top stories. we have a break down. nd our chancellor is buying adler more than 10% this morning. the plan is to create more of the nation's top crurepeen companies. but they don't think it's such a big deal for ado some of the idea of a pure play for berlin may not materialize. berlin has been the focus of the weight the city. morgan stanley upgrading the stock. this is off their expectations targets.fresh -- fresh
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allison rose" one of them is potential revenue moment sfwume the banking business. adam, matt. >> up next, the stock 600 hits and all-time intraday high. we'll break down the moves behind that headline for you. this is bloomberg.
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♪ >> suggested a cut of 500,000 barrels a day. >> compliance will be key. we have not yet reviewed the distribution of the 500,000. >> that's why we're reacting to that possible. thorough est on a analysis of the market. >> the portfolio of those who intended to subscribe. , it's quite diverse.
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♪ >> welcome back to the european open. 51 minutes into your trading day. 52 minute just about. strong gains on the european stocks particularly the london market by 1.6%. the stock market is just over 1.6%. one of our contributors languished that might i have offended some listeners. and we wanted to apologize for that. key risks are ease heading into year end. here are details from the bloomberg's burg e. >> it took four years and some change but we are at a high high following the u.s. this is the highest on record. the last time we had this was in 2015 of april.
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taken,of the things that we're not seeing new regional indexes. not following the leads into new highs. instead what we're seeing is some of these mega caps gary the gain. the stalks over the last five days have eaed the most points to this index. >> we will see it's most think long dan: exchange. we have hsbc. awesome the gig biggest gainers in terms of x. do this is reminiscent of the trade concern being taken off the table. so this is showings us this is a micro story. earnings news story in particular. but the last thing i think we need look at is the volume of a market. so these first few bars in terms
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of volume. nd it's slightly weeker than the 30 day average. >> see the market close. this is also expected to be weeker. what will like little to see. function to key see how much traders are buying in thoy to their ome all-time highs. >> danny. >> let's take a look at what's movinging. and from berlin. there's a lot to choose from. right? >> we have so many developments over the week and weast. >> there's going to be -- there's lot that you would think would buy in it. i think the most interesting move. of the face one trade one deal. the yield shot-up.
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just below the 197 which is the recent high last month. as soon as the details came out or the lack of details came out. done we closed at 182. 197%,f the middle of that 2% rain. and it will come down -- and that's looking a little bit inconclusive right now, man. >> good morning to you, richard. >> we remember thursday night into friday morning and the strength we saw there. also interesting to see that there's not u.k. if that. big caps. wobbling a little bit of the friday session. but today we see the 51 heading home by more than 1 thrs. negative correlation seems have breckin down a limit. >>.
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and i think a lot of it has to do with three years of uncertain it. i think i we're going to see them. exiketly differently. >> at least between now and the end of the year. come next year, they have some of the correlations to reassert themselves and that when we do see the mound coming off and we see they're doing better and vice enter. we had sort of a sell the rumor by the fact. as soon as the election was announced, you'll shot-up. but they're edging back to where we were before the election result. which tells nea they're liking for wad. we're thinking immediately after. richard, thanks very much for joining us. richard joins there rate strategist out of berlin. that's the u.n. victory. up next, you're going to be
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watchings surveillance if you'd prepared to switch to radio,ly say irish had. this is bloomberg. here, it all starts with a simple...
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francine: solid industrial and retail data out of china and hasement on the trade deal the stoxx 600 hitting a high. boris johnson prepares to make a new cabinet after a historic vote and there will be consequences as china threatens retaliation as germany bands huawei. ♪ francine: welcome to bloomberg surveillance. let's check in on the markets.

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